Sun Frontier Fudousan : Annual Securities Report - The 23rd Business Year -

Annual Securities Report

The 23rd	From April 1, 2021
Fiscal Year	to March 31, 2022

Sun Frontier Fudousan Co., Ltd.

(Translation) This document has been translated from the Japanese original for the convenience of overseas stakeholders. In the event of any discrepancy between this document and the Japanese original, the original shall prevail.

A n n u a l S e c u r i t i e s R e p o r t

1. This is an English translation of the Annual Securities Report based on Article 24, Paragraph 1 of the Financial Instruments and Exchange Act filed via the Electronic Disclosure for Investors' Network (EDINET) system as set forth in Article 27-30-2 of the said act.
2. Appended to the back of this document, are English translations of the auditors' report that was attached to the Annual Securities Report when it was filed using the aforementioned method, and the internal control report and confirmation letter that were filed at the same time as the Annual Securities Report.

Contents

The 23rd Annual Securities Report
Cover ........................................................................................................................................................................................................	1
Part I Corporate Information.....................................................................................................................................................................	2
Item 1. Overview of the Company and Its Consolidated Subsidiaries ......................................................................................................	2
1.	Summary of Business Results.....................................................................................................................................................	2
2.	History ........................................................................................................................................................................................	4
3.	Description of Business ..............................................................................................................................................................	5
4.	Overview of Subsidiaries and Affiliates......................................................................................................................................	9
5.	Employees.................................................................................................................................................................................	10
Item 2: Business Overview ......................................................................................................................................................................	11
1.	Management Policy, Business Environment and Tasks Ahead, etc. ...........................................................................................	11
2.	Risk Factors ..............................................................................................................................................................................	13
3. Analyses of Consolidated Financial Position, Operating Results and Cash Flows from the management's perspective ..........	19
4.	Material Agreements, etc. .........................................................................................................................................................	24
5.	Research and Development Activities.......................................................................................................................................	24
Item. 3 Property, Plants and Equipment..................................................................................................................................................	25
1.	Overview of Capital Investment ...............................................................................................................................................	25
2.	Major Facilities .........................................................................................................................................................................	25
3.	Plans for Capital Investment, Disposal of Property, Plants and Equipment, etc. ......................................................................	26
Item. 4 Information on the Company......................................................................................................................................................	27
1.	Information on the Company's Shares, etc. ..............................................................................................................................	27
2. Acquisitions, etc. of Treasury Share..........................................................................................................................................	33
3.	Dividend Policy ........................................................................................................................................................................	34
4.	Corporate Governance, etc........................................................................................................................................................	35
Item. 5 Financial Information .................................................................................................................................................................	56
1.	Consolidated Financial Statements, etc.....................................................................................................................................	57
2.	Non-Consolidated Financial Statements, etc...........................................................................................................................	101
Item. 6 Stock-Related Administration for the Company ........................................................................................................................	116
Item. 7 Reference Information on the Company....................................................................................................................................	118
1.	Information on the Parent Company ........................................................................................................................................	118
2.	Other Reference Information ...................................................................................................................................................	118
Part II Information on Guarantors, etc., for the Company .....................................................................................................................	119
Audit Report
Internal Control Report
Confirmation

Cover

Document title	Annual Securities Report
Clause of stipulation	Article 24, Paragraph 1 of the Financial Instruments and Exchange Act of
	Japan
Place of filing	Director-General of the Kanto Local Finance Bureau
Filing date	June 22, 2022
Fiscal year	The 23rd Fiscal Year (from April 1, 2021 to March 31, 2022)
Company name	Sun Frontier Fudousan Kabushiki Kaisha
Company name in English	Sun Frontier Fudousan Co., Ltd.
Title and name of representative	Seiichi Saito, President Representative Director
Address of registered head office	1-2-2 Yurakucho, Chiyoda-ku, Tokyo, Japan
Telephone number	[phone]
Name of contact person	Takeshi Hirahara, Executive Officer, General Manager of Corporate Planning
	Division
Nearest place of contact	1-2-2 Yurakucho, Chiyoda-ku, Tokyo, Japan
Telephone number	[phone]
Name of contact person	Takeshi Hirahara, Executive Officer, General Manager of Corporate Planning
	Division
Place for public inspection	Tokyo Stock Exchange, Inc.
	(2-1, Nihonbashi Kabutocho, Chuo-ku, Tokyo, Japan)

1/129

Part I Corporate Information

Item 1. Overview of the Company and Its Consolidated Subsidiaries

1. Summary of Business Results

1. Consolidated

Fiscal year		19th	20th	21st	22nd		23rd
Year ended		March 31, 2018	March 31, 2019	March 31, 2020	March 31, 2021	March 31, 2022
Net sales	(million yen)	47,463	53,291	73,218	59,632		71,251
Ordinary profit	(million yen)	10,755	12,813	16,127	7,524		12,215
Profit attributable to	(million yen)	7,420	8,783	10,666	4,274		7,415
owners of parent company
Comprehensive income	(million yen)	7,361	8,563	10,632	4,006		7,738
Net assets	(million yen)	48,849	55,860	64,809	69,773		74,452
Total assets	(million yen)	91,761	110,898	130,293	127,485		136,512
Net assets per share	(yen)	1,003.05	1,145.34	1,326.93	1,368.14		1,463.74
Earnings per share	(yen)	167.62	180.35	219.03	87.77		152.26
Fully diluted earnings per	(yen)	-	180.33	218.97	87.73		152.12
share
Equity ratio	(%)	53.2	50.3	49.6	52.3		52.2
Equity profit margin	(%)	17.6	16.8	17.7	6.5		10.8
Price earnings ratio	(times)	7.0	6.6	3.7	11.0		6.9
Cash flows from operating	(million yen)	(6,989)	(5,988)	(2,697)	4,733		17,443
activities
Cash flows from investing	(million yen)	(2,443)	(4,258)	(4,441)	451		(9,386)
activities
Cash flows from financing	(million yen)	17,235	6,599	5,535	(1,150)		449
activities
Cash and cash equivalents	(million yen)	22,682	18,933	17,394	21,319		29,951
at end of period
Number of employees		381	522	612	641		696
[Number of temporary	(persons)
[335]	[307]	[401]	[475]		[532]
employees]
Notes: 1. Fully diluted earnings per share for the 19th fiscal year is not stated because there are no dilutive shares.

1. "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29 as of March 31, 2020) has been applied from the beginning of the 23rd fiscal year. Major management indicator, etc. for the 23rd fiscal year are the indicators after the application of the accounting standards, etc.
2. The Company has adopted the Employee Stock Ownership Plan (J-ESOP) since the 19th fiscal year, and the Company's shares held by the trust account of the Employee Stock Ownership Plan are included as treasury shares in the consolidated financial statements for the 19th fiscal year and thereafter. Therefore, when calculating earnings per share, the weighted average number of shares for the period in common shares is calculated including the number of the said shares in treasury share. In calculating the amount of net assets per share, the said number of shares is included in the number of treasury shares to be deducted from the total number of issued shares at the end of the period.

2/129